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Tuesday, December 29, 2015

Casual Players Are Not Necessarily Newbies Or Bad Players

A few weeks ago I wrote an article about why it was both unwise and wrong to pay grinders to play Magic -- that is, to pay more than 100% of admission fees for tournaments out into a prize pool, placing the prize pool into negative escrow so that the average player EV is a profit and the average store EV is a loss.

I termed this practice "social OP prizing" because it comes from an illusory promise on the part of the grinders that if a store will, in effect, pay them to play cards, the store will more than make it up in other spending, on sleeves, snacks, sodas, etc.

This promise is illusory because the player community can enforce the store's payout via social means (hence "social OP prizing") but the store can never really enforce the player's spending. Many of the grinders making that promise have no intention whatever of spending one cent more than they absolutely have to spend, and fully expect to profit from the negative escrow. They expect to be paid to play cards.

Some store owners are socially adept enough to manage some modicum of enforcement, and good for them. It's an extremely fine line to walk. But that management doesn't scale well, and you can't get blood from a stone. So the store has to make up the difference somewhere. And that's going to come from the customers who do spend, which my article termed "angel customers" (as is one of the common monikers used within the trade). And the second half of my article's argument rests upon that: it is unfair and wrong to expect angel customers to subsidize the grinders through ongoing negative escrow.

The above four paragraphs set forth my argument from that article, leaving out all the explanation and groundwork by which I built the case for it. As sometimes happens, the underlying argument kind of got lost in the volume of explanation, and that's bad writing and editing on my part. I'm sorry about that.

OK, so I posted the article on December 15th. I shared it around the retailer groups on Facebook, and we had some neat business discussions on it. A day or two later, individuals wanting to stir the pot posted a copypaste of the article (unlinked, improperly attributed) to my regional grinder Facebook group. The admins kindly deleted the infringement and I posted a genuine link, rather than having an endless litany of bootleg ones pop up. The discussion that ensued had a few people who got the point, and a few who missed it. Mainly a lot of grinders got caught up in assuming my objective was to encourage stores to eliminate or curtail competitive play. Overwhelmingly that was the take-home from the negative reactions.

Almost a week later, someone posted the article to the Magic subreddit. Eerily the same discussion ensued. Some folks got the point of the article, others, mostly grinders, took the article as an indictment of competitive play in a broader sense. Again, my explanation overwhelmed the reader, leaving no room to appreciate the money shot. And today's article is largely in answer to those grievances.

You'll note that somebody else, not me, initiated both postings of that article to player-focused forums. I had no intention of posting that article to such audiences. The internet is public and I don't have any objection to people reading these articles -- in fact, I know many local players enjoy the "peek behind the scenes" this blog provides -- but this is a business blog written primarily for an audience of those interested in the comic and hobby game trade. Everyone is welcome to read, just understand that the context is going to be business-oriented so that's the perspective you're going to be shown. At no point was this written as a troll or ploy for attention. I almost wish it was, I got more page views from reddit than I had gotten in the past three months of articles combined. Apparently I need to get into the clickbait business. That's where the money at.

I think the best approach I can take here is to address the major complaints in turn, because that will lead us to the underlying misunderstanding, as you'll see. So, in Q&A format, here we go.

Q: Why are you so upset about stores that run social OP prizing? Is your business failing?

A: Well, 2015 was our best year ever, in gross and net, by a lot. So we're okay. And this is business, there is no emotional dimension to this. I'm not "upset" at anything. This is a Millennials thing I believe, projecting emotion onto everything they see, hear, and read. I'm Gen X. Born in 1974. We can't afford feelings; the baby boomers spent all our money. And yours too, as it turns out. See? We have more in common than you thought.

Q: How is social OP prizing any different from just spending promotional dollars / advertising?

A: Different mechanic, different time-frame, different objective. First of all, an advert is store-initated from its very core. There is no exchange of promises; the store gratuitously offers deal X and all comers may partake of it as they wish. Second of all, adverts can be one-off things. And in fact I completely support the idea of a store having special tournaments that go over 100% in prizing -- big events, that sort of thing. Memorial Day Legacy tourney, 1st prize Black Lotus. Maybe the store profits, maybe it loses money. It's not social OP prizing because there's no ongoing component and thus no contiguous escrow. Finally, the purpose of advertising and promotion is to generate arrivals -- that is, to gain customers first and foremost, by acquisition and retention. Organized play can and does fulfill both halves of that function at times, but OP that is focused on grinders only serves the retention part of that objective. A grinder is already a player, and already has his or her game, and already plays it, and already knows where there are events for it, and where the highest EV is. Accordingly, the promotional dollar spent to attract that grinder's business doesn't have the same ROI as a promotional dollar spent toward the wider audience of non-grinders. Orienting tournaments toward grinders, if you think of it as an advertising expense, is buying a six-pack and pouring three cans out on the curb. You paid for all six, but you end up only getting to drink half.

Q: What about the argument that grinders are good for your store because they bring in more players for tournaments?

A: So I should lose money on OP and... make it up in OP volume? That's a bold plan, Cotton. Rather than losing money at all on OP, it is healthier and more sustainable to grow sales organically, which is what I do, by offering competitive prices and selection. It turns out that attracts a crowd too, filling the seats in my game room, and I am content to let organized play run at break-even.

Q: But you aren't at break-even! You're paying out in store credit so you get full profit!

A: Not really. The margin on redeemed credit from events helps to offset the cost of the thousand square feet of space with tables and chairs and no product in it. Those sales of snacks and sodas? Those also help offset the cost of that space. There's an equilibrium most stores reach. The cheaper the location, the more likely the store can run negative escrow and survive -- setting aside whether they should, and looking at only whether they could. In the end, a store can't take losses in all these different places and expect to make it all up with Dr Pepper. It just doesn't happen.

Q: You're wrong about whether Magic is a competitive game. WOTC spends a lot of effort and money on making Magic competitive first and foremost, with the Pro Tour and so on.

A: Here we come to the crux of the issue. Grinders think they are most of the Magic-playing market, and almost the complete opposite is true. Wizards of the Coast has spent untold blood and treasure to attract new and casual players and that is almost entirely where their business focus is. The Pro Tour costs what, a few million dollars a year to stage? Magic grossed $330 million in 2014. The marketing toward competitive players is chump change compared to what Hasbro puts towards acquisition -- the strategy they embarked upon in 2009 starting with the Magic 2010 Core Set and the original Zendikar, and which resulted in the Magic boom that continues to this day.

At the Atlanta GTS Distribution trade show, WOTC floated a figure that something like 85% of all DCI numbers have never been used outside of a prerelease. Never! Mark Rosewater is frequently commenting on figures like how 38% of Magic players are female but only 5% of players who play in sanctioned events frequently are female. WOTC's own marketing materials that come with intro decks and prerelease packs tell players to start with Intro Decks and Deck Builder's Toolkits, move from there to Fat Packs, and lastly on to straight booster packs. If you are a grinder and hang out with grinders and visit grinder internet sites and post on grinder Facebook groups, it is very easy to think the entire Magic player base is grinders, and a few noobs who haven't learned to grind yet. From my perspective here in the trade, other store owners and I see very different numbers in very different ledgers. We see our lifeblood being provided by a vast ocean of players who play for fun.

I do not hate grinders. I even like having grinders in the store in some respects. They help set the expectations and the etiquette for competitive play, especially when they're personable and friendly. And because so many grinders live from deck to deck (losing them more EV than they ever gain grinding, paradoxically) they keep my singles case nice and full with their trade-ins.

I could write an entire article about how grinders give up all their gains when they fly to a Grand Prix or something and cash for $200, or don't finish in the money at all. Yes, yes, I know, it's a long game, lifetime winnings are what counts, not just short-term gains and losses. But seriously, and be honest now, how many of you are net-positive lifetime? Millions of Magic players, and only seventy-six of them (as of this writing) have cashed to six figures total after how many years of buying, collecting, playing, failing, learning, testing, playing again, all those hours, all those dollars. On that same list, only 179 people total have earned more money playing Magic in their lifetimes than a kindergarten teacher earns in one year of salary and benefits. You guys are bending over a dollar to pick up a dime over and over again, but you assail the store owner who won't pay three packs per player into your five-dollar buy-in.

So, then. No, I don't hate grinders. You guys exasperate me sometimes. I wish you had the perspective that comes from years of been-there-done-that. One day you will.

From a business perspective, the numbers don't lie, and the numbers say that casual players far outnumber the grinders, and that's where a store should focus its promotional efforts.

Importantly, the grinder community is not the only place where competitive, high-level Magic play will occur.

A casual player is not necessarily a newbie or a bad player. This is the fundamental misunderstanding that grinders have about casuals. Don't pretend otherwise, I read your subreddit threads, I read your Facebook groups. To a grinder, "casual" is a synonym for "Noob with Craw Wurms." You know it's true. And that's part of how you misapprehend how crucial casual players are to the ecosystem. You figure if they can't get good, they'll quit, and if they do get good, they'll turn grinder, and that's who is out there, so what else matters? Turns out that's not the case.

Here is what casual players are in my store's events:

Pro-tour players who just want to play and sharpen their game, and don't care about EV as long as it's not atrocious.

Drafters who gave up the Standard treadmill years ago, but still love Magic, who are practiced and expert and tend to go 4-0 at prereleases, and sometimes cash at sealed Grand Prix, but may not keep up with archetypes.

Commander players who have heavy "Johnny" player profile tendencies and would rather invent something than merely pilot a deck. And they're not just durdlers; some of these players' Commander decks are downright lethal, rivaling anything I see in the online decklists.

Experienced players who simply don't like playing against opponents other than their friends.

Adult players who prefer not to play against teens or younger adults because they have more fun against their peers.

Teens and younger players who prefer to play against one another because they find older adults too intimidating.

Women who like to play in a better-adjusted player group and didn't like the time she visited that one store and the repressed 19-year-olds kept staring at her chest.

Competitive players who go full-blast at Grand Prix and PPTQ events but don't like spending their Tuesday evening matches against a guy blasting EDM into his earbuds rather than interacting in the game on the table.

Yes, some number of new players.

And yes, some bad players. But practice makes the difference. I would go so far as to say no player is truly bad if that player is attempting to improve his or her game.

That's a lot of players. And the Magic player experience is fluid -- a grinder may drift in and out of some of those archetypes over time. It might even be more accurate to say a casual player drifts in and out of grinderhood once in a while. Maybe funds get tight but they don't want to stop playing, so they have to hunker down. Whatever.

Competitive play is good. High-level play is good. Substantial stakes and prizes can be good. There is room in the Magic universe for a wide spectrum of players and experiences. But stores need to keep in perspective that the most vocal contingent of players does not represent the true customer landscape, and it is unwise and wrong to tailor the entire organized play economy based on an incorrect premise.

I don't really want to end the year's posts on that note, but I don't know what kind of time I'm going to have to write again this week as business has kept me insanely busy since mid-month. If I don't manage to put up some sort of Retrospecticus in the next 48 hours, cheers to you all, and have a wonderful 2016!